President Chain revenues rise

President Chain Store Corp (統一超商) reported revenues of NT$77.63 billion last year, an increase of 7.8 percent from the previous year, thanks to a strong performance from its reinvestments outside convenience store operations, a company official said yesterday.

The company saw after-tax net profits of NT$3.68 billion last year, a surge of 42.08 percent from NT$2.59 billion the previous year, and earnings per share of NT$4.29 last year.

The revenues of the company's non-core business saw the greatest leap of 460 percent from NT$150 million in 2002 to NT$840 million last year.

Strong performers

President Chain, the nation's largest convenience store operator, with 3,538 7-Eleven outlets nationwide, has invested in President Transnet Corp (統一速達), which manages the Japanese delivery service Takkyubin (宅急便), health and cosmetics retailer Cosmed (康是美), and Philippine Seven Corp, which runs 204 7-Eleven outlets in the Philippines, among other enterprises.

"We are confident about bringing in more profits for our investors this year," Hsu Chung-jen (徐重仁), president of President Chain, told investors at a press conference yesterday.

According to another company official, President Transnet Corp's performance showed improvement.

"It reported losses of NT$360 million in 2002 and the figure shrank to NT$63 million of losses last year. We are optimistic that it will make a profit this year," said Wu Wen-chi (吳玟琪), the company's head of investor relations.

More 7-Elevens

The company plans to open another 226 7-Eleven outlets this year, an increase of 6.5 percent.

As some investors expressed concerns that the nation's convenience store sector is becoming saturated, Hsu said the company plans to explore the massive retail market both at home and abroad, including China and Southeast Asia.

"I believe hypermarkets and supermarkets are the focus of the retail sector in China," Hsu said.

"Even though President Chain cannot currently enter China with the 7-Eleven brand name, the company has projected various investment strategies for across the Taiwan Strait."

Wu said the company is tapping rising consumer spending in China with re-investments in supermarkets in Qingdao and Beijing, Cosmed drug stores in Shenzhen, Starbucks coffee shops in Shanghai, and a hypermarket that is expected to open in Shandong Province this year.

With President Transnet Corp gradually becoming profitable, two major issues will be left to concern investors, a market watcher said.

Finding a niche

"One is the company's large-scale investment projects, such as the BOT [build, operate, transfer] property development project with the Taipei City Government and the Dream Mall in Kaohsiung (夢時代購物中心). The other is whether it can find a niche in the massive China market," said Neo Lee (李承瀚), a researcher with SinoPac Securities Corp (建華證券).

Investors hope the company can focus on its core retail business, Lee said.